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A scarcity of jobs and simultaneously rising rents and cash rates have created an uneasy rental environment on the NSW mid-North Coast, with one local property manager describing it as a “balancing act.”
Like many other Australian jurisdictions, Port Macquarie rents have boomed in the last 12 months as the Reserve Bank of Australia’s (RBA) cash rate increasing cycle — which continued during its May board meeting — and diminished supply, bred an environment conducive to such increases.
According to Janeal Smith, principal at local agency Port Property Professionals, this climate has created a “balancing act” for property managers in the region dealing with both sides of the coin, tenants and landlords, to diminish the bumbling tension lingering beneath the surface.
“It is a balancing act between increasing the rent because the landlord now has an increased interest rate, which technically do[es] not get passed on straight away [and] realising that tenants have a family and lives,” she said.
“So, I’m constantly educating both sides — tenant and landlord — that we have to work together through this,” she revealed.
At present, nearly 30 per cent (28 per cent) of Port Macquarie’s 50,000 residents rent.
With a vacancy rate of just 1.14 per cent, Ms Smith explained supply and cash rate increases aren’t the only factors driving the region’s rental woes, with an equally tight employment market having a “huge knock-on effect” in the region.
Tenant struggles with increased cost-of-living pressures are being exacerbated as the region’s wages have been unable to match rising costs, with Ms Smith admitting, “We have seen an increase in couples separated and their work hours cut back as some businesses are struggling to stay open.”
With the idyllic mid-North Coast town attracting a wide number of new residents due to its prospects of a relaxed coastal lifestyle, Ms Smith explained that “jobs are not as readily available as if you were to work in the city.”
As a result, Port Property Professionals has introduced a range of new schemes to accommodate the rising cost environment, including offering landlords the opportunity to drop from full property management services to just rent collection.
“Has this impacted my business? Yes, it has,” she acknowledged.
But, she conceded that “at least the landlord has not had to sell the property, and the tenants do not have to move out and find a new place to live.”
Ms Smith explained such arrangements, when taken up, go into place for 12 months before they revert to the original agreement of full management services.
“As the saying goes, a bird in the hand is worth two in the bush,” she said.
Moreover, Port Property Professionals has begun offering holiday letting, maximising the Port Macquarie market, a decision Ms Smith revealed was equally inspired by increased popularity as a NSW holiday destination and its capability to replace funds lost through the winding back of other business services.
“This gave me the idea to expand [the business’s offerings] to make up for the reduction in fees until the storm is over,” she said.
Moving into the back half of 2023, Ms Smith believes property manager burnout will be a major challenge, not just in her business but right across the country. From her perspective, principals need to increase the investment of both time and money into their property management team if they want to possess high-quality property managers.
She added that offering financial rewards or incentives to mitigate the risks burnout presents employees should be an avenue explored by the industry especially considering the “brutal abuse” some property managers receive on a daily basis, which Ms Smith described as “full on.”
Interestingly, she highlighted that expectations from all sides of the rental process are the biggest challenges.
“Everything is so reactive, and people expect immediate responses not realising that you could be in a meeting, doing an ingoing, or training. They want updates or answers immediately,” she said.
“This is where you must set boundaries with tenants and landlords and say, ‘If it is an emergency, then text me. Otherwise, I will do my best to get back to you within 24 to 48 hours’,” she added.
Safeguards are key to minimising these challenges, with Ms Smith encouraging property managers to improve their communication skills, build stronger relationships with both tenants and landlords, increasing their training.
Crucially, she insisted that property managers “get out of the mindset that this is a tough job. It’s really not. It can be fun, exciting, and challenging.”
“It’s all about the mindset, thinking outside the square to find new opportunities to do things differently,” Ms Smith concluded.
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